Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q1 FY2018 Earnings Presentation
53 slides from Muthoot Finance's earnings presentation, June 2017
Slide 1: Financial Results Q1 FY 2018
Financial Results Q1 FY 2018 June 2017 MUTHOOT FINANCE LIMITED
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 3: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 4: MFIN - A Glimpse
MFIN - A GLIMPSE 29 152 tonnes States/Union territory presence Gold jewellery kept as security 4,200+ 300,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 23,000+ 130,000+ Team members Customers served every day ` 278,517 mn Loan Assets Under Management (
Slide 5: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake 23.71 2.42 NSE Ticker MUTHOOTFIN (%) Shareholding as on June 30, 2017 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on June 30, 2017) ` 181,849 million 73.87 4
Slide 6: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 Dividend (% )* 60 60 60 45 60 First Interim Dividend (%) 60 40 40 30 - - Second Interim Dividend (%) - 20 20 - Final Dividend (%) - - 20 10 45 Dividend Payout Ratio (%) 20.30 29.50 35.36 28.59 1
Slide 7: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4285 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 15 6 Himachal Pradesh 5 Chandigarh Punjab 8 175 62 East West Uttarakhand 21 Haryana Delhi 15 127 225 North South Rajasthan Uttar Pradesh Assam 132 18 155 Bihar 17 (
Slide 8: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Aadhaar based Electronic KYC Direct Credit Facility • Biometric KYC verification - Convenience • Loan proceeds credited to bank • No further KYC documents –Paperless account • Aadhar • NEFT/RTGS/IMPS mode of bank •
Slide 9: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 10% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Our online services has now been re-branded to • Launched in Nov’16 has about 2.25 lakhs Muthoot Online, from WebPay earlier. downloads. • Customers can
Slide 10: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Jun-17 Mar-17 Jun-16 Growth Growth (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 3,995 3,995 3,991 0 0 Reserves & Surplus 64,688 61,169 54,924 18 6 Total 68,683 65,164 58,915 17 5 9
Slide 11: Assets
ASSETS Core focus continues to be gold loan Gross Loan Assets under management Jun-17 Mar-17 Jun-16 Growth Growth (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross loan assets under 278,517 272,785 258,606 8 2 management Break-up of Gross Loan Assets under management Gold Loans unde
Slide 12: Liabilities
LIABILITIES Stable sources of funding Jun-17 Mar-17 Jun-16 Growth Growth (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures 21,058 25,190 36,355 (42) (16) (Muthoot Gold Bonds) Secured Non-Convertible Debentures- 55,359 37,098 40,044 38 49 Listed Borrowing
Slide 13: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 Growth FY 2017 (%) INCOME Interest Income 13,758 16,995 12,752 8 56,546 Other Income 228 137 256 (2) 921 Total 13,986 17,132 13,008 8 57,467 EXPENDITURE Interest Expense 5,326 5,460 5,571 (4) 22,938 Personne
Slide 14: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 300 272 278 260 270 258 244 243 233 240 216 210 180 157 150 120 90 73 60 33 30 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Mar-17 Jun-17 13
Slide 15: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 152 160 146 149 142 137 134 140 131 118 120 112 100 80 66 60 39 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Mar-17 Jun-17 14
Slide 16: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Mar-17 Jun-17 East 1 2 3 4 5 6 6 7 7 7 7 West 5 8 8 10 11 13 15 17 18 18 19 North 14 15 15 17 19 22 22 22 22 23 23 South 80 75
Slide 17: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 63.69 64.82 63.20 65 60.14 57.55 56.93 55.01 55 45.74 50.63 45 33.50 35 25 15 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Mar-17 Jun-17 16
Slide 18: Yield on Loan Assets and NIM
YIELD ON LOAN ASSETS AND NIM Yearly (%) Quarterly (%) 26.00 26.00 25.06 24.00 24.00 21.67 22.34 21.43 22.00 22.00 20.27 19.72 20.30 20.00 21.66 19.31 20.06 20.00 19.94 19.72 17.01 18.00 18.00 16.00 16.00 12.74 12.29 14.00 14.00 11.43 11.69 11.07 11.17 11.38 12.00 10.81 12.00 10.84 10.47 9.79 8.87 10
Slide 19: Interest Spread
INTEREST SPREAD Yearly (%) Quarterly (%) 26 26.00 25.06 24 24.00 21.67 22.34 21.66 22 21.43 22.00 19.94 19.72 20.27 19.72 20 19.31 20.06 20.30 20.00 18 15.42 18.00 16 16.00 14 14.00 12.20 12.42 10.85 11.88 11.53 11.88 10.73 12 10.85 10.93 10.90 10.80 9.65 10.14 12.00 9.45 9.33 10 9.24 8.39 10.53 10.
Slide 20: Return on Average Loan Assets
RETURN ON AVERAGE LOAN ASSETS Attractive returns over the years Yearly (%) Quarterly (%) 5.50 5.50 5.00 5.12 5.00 4.40 4.47 4.75 4.50 4.21 4.24 4.50 4.05 4.30 4.00 4.00 3.49 3.50 3.22 3.50 3.03 3.32 3.00 3.00 2.50 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 2.50 Q1 FY 2018 Q4 FY 2
Slide 21: Non-Performing Assets & Bad Debts
NON-PERFORMING ASSETS & BAD DEBTS Non-Performing Assets (` in million) Jun-17 Mar-17 Jun-16 Gross Non-Performing Assets 6,279 5,621 5,618 Provision For Non-Performing Assets 1,019 1,019 1,019 Net Non-Performing Assets 5,260 4,602 4,599 % of Gross NPA on Gross Loan Assets 2.25 2.06 2.17 % of Net NPA
Slide 22: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) 2 Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 21,058 mn (10%) 10 2 13 Secured Non-Convertible Debentures – Listed – ` 55,359 mn (25%) 6 25 Borrowings from Banks/Fis - ` 93,049 mn (42%) Subordinated Debt – ` 13,423 mn (6%) Su
Slide 23: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 40,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 2,000 ICRA A1+ Very s
Slide 24: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 60,000 56,546 60,000 53,641 50,000 49,077 48,130 50,000 45,280 42,703 40,000 40,000 30,000 30,000 22,983 20,000 16,995 20,000 13,758 12,752 10,775 10,000 10,000 6,062 0 0 Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 Mar-09 Mar-10 Mar-11 Ma
Slide 25: Operating Expenses to Average Loan Assets
OPERATING EXPENSES TO AVERAGE LOAN ASSETS Operational efficiency over the years Yearly (%) Quarterly (%) 8.50 8.34 8.50 8.00 8.00 7.50 7.50 7.00 7.00 6.50 6.50 6.00 6.00 5.45 5.63 5.50 5.50 5.01 5.10 4.92 5.00 4.72 5.00 4.46 4.44 4.28 4.50 4.50 4.02 4.08 4.00 4.00 3.50 3.50 Mar-09 Mar-10 Mar-11 Mar-
Slide 26: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in Millions) Quarterly (` in Million) Q1 FY Q4 FY Q1 FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2018 2017 2017 Personnel Expenses 7,280 6,418 6,304 5,917 5,453 4,145 2,209 1,169 677 1,773 1,801 1,849 Rent 1,808 1,713 1,650 1,542 1,309 1
Slide 27: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (%) Quarterly (%) Q1 FY Q4 FY Q1 FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2018 2017 2017 Personnel Expenses 48 49 53 52 52 49 43 43 42 56 31 58 Rent 12 13 14 14 12 12 12 11 8 16 8 13 Advertisement 3 5 5 6 5 10 13 12 13 6 3 4 Postage, Tel
Slide 28: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) Q1 FY Q4 FY Q1 FY (Based on Income) Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2018 2017 2017 Interest expense to Gross 39.92 46.31 48.71 53.08 52.34 52.10 44.83 43.49 49.94 38.08 31.87 42.83 Income Selling, general and administrative
Slide 29: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Average Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Q1 FY Q4 FY Q1 FY Loan Assets) 2018 2017 2017 Interest income to avg. 21.43 19.72 19.30 20.27 21.66 22.34 19.72 19.94 21.67 20.06 25.06 20.30 loan assets Interest expense to
Slide 30: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 20,000 19,210 20,000 18,000 18,000 16,000 15,114 16,000 14,000 13,312 13,168 14,000 11,936 11,798 12,000 10,279 12,000 10,042 10,000 10,000 7,612 8,000 8,920 8,000 7801 8,096 6,000 6,000
Slide 31: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 68,683 70,000 65,164 58,915 60,000 56,192 50,835 50,000 42,646 37,356 40,000 29,257 30,000 20,000 13,344 10,000 5,845 3,712 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Jun-16 Mar-17 Jun-17 30
Slide 32: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 30 48.10 51.52 50 45 25 20.98 41.90 19.80 18.78 40 20 35 33.90 30.15 15 30 25 19.44 10 20 19.50 15 5 14.35 15.13 10 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 0 Q1 FY 2018 Q4 F
Slide 33: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Jun-17 Mar-17 Jun-16 Capital Adequacy Ratio 25.61 24.88 24.27 Tier-I 22.65 21.78 21.03 Tier-II 2.96 3.10 3.24 32
Slide 34: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 Earnings per share (`) - Basic 8.79 8.06 6.77 29.56 - Diluted 8.76 8.13 6.71 29.45 Jun-17 Mar-17 Jun-16 Book Value per share (`) 171.76 162.98 147.51 Market price per share (`)* 4
Slide 35: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Jun-17 Mar-17 Jun-16 Outside Liabilities 249,141 241,966 226,641 Cash & Bank Balances 21,063 15,343 12,481 Tangible Networth 68,626 65,104 58,862 Capital Gearing 3.32 3.48 3.64 34
Slide 36: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25,351 24,881 25,012 24,205 22,882 22,781 23,165 23,391 23000 18000 16,688 13000 9,745 8000 5,979 3000 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Mar-17 Jun-17 35
Slide 37: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY & Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company 36
Slide 38: Asia Asset Finance PLC – An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on June 30, 2017, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio stands
Slide 39: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 38
Slide 40: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 39
Slide 41: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 LKR / INR 0.41706 0.42113 0.44908 0.42113 Number of branches 17 15 15 15 Number of Employees 449 448 393 448 Loan Portfolio (LKR) 9,082 8,662 7,421 8,662 Capital Adequacy Ratio (%) 21 19 21 19 Total Reven
Slide 42: Our Subsidiary: Muthoot Homefin
OUR SUBSIDIARY Muthoot Homefin 41
Slide 43: Muthoot Homefin – An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It is a subsidiary of Muthoot Finance Limited . As on June 30, 2017, Muthoot Finance holds 88.27% of equity capital of MHIL. MHIL focuses on extending affordabl
Slide 44: Business Performance
Business Performance (` in millions) Particulars Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 Number of branches 11 9 2 9 Number of Sales Offices 110 110 39 110 Number of Employees 135 111 49 111 Loan Portfolio (`) 5,957 4,408 441 4,408 Capital Adequacy Ratio (%) 27 36 177 36 Total Revenue (`) 192 135 1
Slide 45: Business Performance
Business Performance (%) Particulars Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 Yield on Advances 12.67 13.05 9.75 12.74 Interest Spread 3.55 3.66 - 3.31 Return on Assets (ROA) 3.08 3.26 (4.64) 2.42 Return on Equity (ROE) 16.36 9.82 (3.10) 3.64 Disbursements Loan Book Presence in Debt Equity 5.28x Rs
Slide 46: Financial Highlights Growth
• Disbursements in Q1 FY 2018: Rs 1,584 mn. Loan Book as on June 30, 2017: Rs 5,957 mn • Average Ticket Size in FY 2017: Rs.1.0 mn • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Kerala, Presence in 29 locations Financial • ROA for Q1 FY 2018: 3.08%, ROE for Q1 FY 2018: 16.3
Slide 47: Our Subsidiary: Muthoot Insurance Brokers
& Muthoot Finance Muthoot Insurance Brokers
Slide 48: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in June 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various in
Slide 49: Key Business and Financial Parameters
Key Business Parameters (` in millions) Particulars Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 Premium Collection (` ) 157 259 102 697 Number of Policies 216,301 176,929 136,212 566,282 Key Financial Parameters (` in millions) Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 Total Revenue (`) 25 46 15 116 Tot
Slide 50: Our Subsidiary: Belstar Investment and Finance
&) OU R SU BS IDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 49
Slide 51: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As of June 2017 , Muthoot Finance holds 64.60% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC-MFI” by RBI ef
Slide 52: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars Q1 FY 2018 Q4 FY 2017 Q1 FY 2017 FY 2017 Number of branches 172 155 94 155 Number of Employees 1,240 1,093 705 1,093 Loan Portfolio (`) 6,285 5,668 2,872 5,668 Capital Adequacy Ratio (%) 20 17 16 17 Total Revenue (`) 419 332 178 1,034 Total Expens
Slide 53: Registered Office and Investor Contacts
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N 16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional